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AUD/JPY – Heading to 100.00?
AUD/JPY -- Heading to 100.00?
The Australian dollar hit 4 year lows today and the pain for longs may not be over. RBA Assistant Governor Lowe suggested that the central may consider lowering rates if it felt that the economy would slow materially over the next few quarters. Certainly the rapid deceleration of growth in China is starting to weigh on the prospects of Australian growth and the latest rate cutting move by the PBOC can be viewed more as a sign of weakness rather than strength for Australia. Meanwhile, despite positive US data USDJPY has failed to rally and has in fact started to correct off the 119.00 highs. Any disappointment in US data can taken as a sign for profit taking and could push AUD/JPY to a quick retest of 100.00 over the next few days.
Techincally AUDJPY pair has turned in a major reversal off the 102.00 level and now targets 100.00 as the near term support. A break there opens up a run to 98.00 while only a close above 102.00 negates the bearish bias.